Illinois-based Amazon affiliates go dark

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JEREMY HOBSON: Today is the day thousands of retailers in Illinois had been dreading. That's because they'll lose their affiliation with online retailers like Amazon and Overstock.com, thanks to a new state sales tax for online purchases.

But as Tony Arnold reports from Chicago Public Radio, Amazon and others have already found a way around the tax.


TONY ARNOLD: Brad Wilson runs the aptly named BradsDeals.com -- a coupon web site based in downtown Chicago.

BRAD WILSON: Ultimately, Amazon and Overstock hold the trump card in this situation.

Wilson says after today -- Amazon will boycott business with BradsDeals -- and roughly 9,000 other retailers in Illinois to skirt the tax. Illinois residents can still go online and get the latest best seller from Amazon, they just won't be getting that book from any Amazon affiliate in Illinois.

WILSON: We're looking at a lot of options that I wouldn't want to have ever had to think of, unfortunately.

Wilson says he's considering picking up shop and relocating to another state to make up for the money he'll lose. He wouldn't say how much.

One Amazon affiliate -- FatWallet.com -- has already moved its headquarters from Illinois to Wisconsin which doesn't have the online tax. Amazon did not respond to requests for comment.

Meantime, Overstock.com's president Jonathan Johnson confirmed his company plans to cut off Illinois affiliates on May 1st. Others like Zappos and Shoes.com are planning a similar move.

David Vite is with the Illinois Retail Merchants Association. He says the Amazons and Overstocks are shirking their responsibility to communities by ducking the sales tax.

DAVID VITE: Unfortunately, Amazon has chosen to ignore the laws of the states in which it does business and that is putting brick and mortar retailers at a competitive disadvantage.

Vite estimates Illinois could gain an extra $130 million a year from the new sales tax. While Brad Wilson from BradsDeals.com says Illinois could lose more money from businesses fleeing the state. Meantime -- Illinois Senator Dick Durbin plans to introduce a bill to require online retailers to pay state sales tax.

In Chicago -- I'm Tony Arnold for Marketplace.

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